Apple Case Study
Submitted by: Submitted by carlostribos
Views: 10
Words: 1245
Pages: 5
Category: Business and Industry
Date Submitted: 06/06/2016 01:57 PM
legland@hec.fr
Apple
2011
Share
Buy
Back-‐
Problem
• For
all
the
case,
you
will
consider
that
you
are
in
September
2011.
1
Apple
2011
Share
Buy
Back-‐
Problem
•
•
•
•
•
•
•
•
•
•
•
For
all
the
case,
consider
you
are
in
September
2011.
Apple’s
2011
Cash
return:
0,4333%
bef.
Taxes
(Tax
rate:
25%).
1
-‐
Make
a
financial
Analysis
of
Apple
2
–
Explain
Apple’s
nega>ve
Working
Capital
Requirement
?
When
Apple’s
negaCve
WCR
Increases
(for
example:
from
-‐
70
to
-‐90),
what
is
then
the
impact
on
EBIT
?
3
-‐
In
2011,
what
is
the:
3.a
“Capital
Employed
marginal
return”
?
3.b
“ROE’s
marginal
return”
?
4
-‐
Make
an
analysis
of
Apple
Share
Price
&
Valua>on.
5
-‐
Why
are
there
every
year
rights
issues
?.
6
-‐
What
is
2011
Cost
of
Equity
?
Cost
of
Capital
?
7
-‐
An
analysts
has
a
fair
value
of
$
750
per
Share,
(vs
Sept
25th
2011
share
price:
$
350):
using
Apple’s
2011
$
75bn
cash
to
buy
back
shares
(one
for
five
at
$
400),
would
boost
fair
value
per
share
above
$
750
!
Do
you
agree
?
New
share
price
?
8
–
Assuming
Apple
management
follows
the
analyst...
